DS&H - CFO study findings: Pathwats to become lean & strategic

1. June 2011
Confidential and Proprietary to DS&H
DS&H CFO Study Report
CFOs: Pathways to become lean & strategic
Seeing clearly ahead is now paramount
Andr Du Sault, MBA (LBS), MPA (Harvard)
www.dusaulthaddad.com
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Study framework
INITIAL OBJECTIVES & KEY QUESTIONS
In an environment of hyper competition, accelerated changes, how can CFOs build on their technical expertise to play a greater strategic role?
What is the profile of the new CFO incarnation? What new capabilities CFOs need to
develop or acquire? What is blocking them?
3.What are the new expectations of the key stakeholders?
METHODOLOGY
We have interviewed about 50 senior executives from a broad range of perspectives:
CEOs, CFOs, HROs, IT specialists, bankers, headhunters, administrators, etc.
FOR WHOM
CEOs, CFOs, VP Finance, Controllers, keen to build value added in the Finance function.

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CFO study findings (6)
Young CFO candidates are caught between two outlooks:
. A narrow view of the job in smaller companies, with standard financial reports as the main output
. A demanding role in larger companies, where CEOs increasingly require lean-minded & strategic CFOs
CFO candidates are usually not schooled to be CFOs, leading to a poor blend of technical and strategic skills
Key management and strategic skills are often integrated too late in the CFO career path to yield senior influence at the C-Level
The job of Controller or young CFO stands at a pivotal point: What is integrated at that level (style, learnings, skills, responsibilities) shapes the potential for the CFO position.
CFOs receive little or any coaching when handling high stake transactions that will make or break their reputation and credibility
The pathway from CFO to COO/CEO is misunderstood and misapplied

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FROM FINANCIAL ACCOUNTING TO CO-PILOT
There is increasing pressure on CFOs to perform under
tight budgets & means
an expanding scope of strategic responsibilities
changing structures moulded by globalisation
and the need to balance flexibility and efficiency.
.
Yet the roadmap for improvement and a new skills set is often unclear for many CFOs.

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FROM FINANCIAL ACCOUNTING TO CO-PILOT
In many competitive industries, stakeholders require a lean & strategic CFO as co-pilot for the enterprise
Controller
Co-pilot
Lean
TECHNICAL PRESSURES
New accounting standards
New business processes
Complex Information technology
Designing information architecture
Facing budget limitations
CEO
Board
Investors
Bean counter
Bankers
Standard
Functional
Strategic
STRATEGIC PRESSURES
Leading business transformations
Leading operational excellence
Networked organisation
Managing international ventures
Outsourcing, off shoring
Deal maker

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FROM FINANCIAL ACCOUNTING TO COPILOT
Young CFOs start off with technical tools to address technological challenges,
but soon face a wide range of expectations from stakeholders to deliver strategic value
master of cash flow
business plan - strategy
proper controls in place
Investors
transparency integrity -controls
financing strategy
CEO CFO relationship
Board
intelligent reports
business acumen
value driven
CEO
CFO
master of cash flow
finance skills
business communication
Bankers
processes
planning
controls
info
IT
clear policies
information
systems that work
Employees
Head-hunters
team building
leadership & people skills
technical & strategic skills

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The roadmap from technical expertise to strategic CFO will include 3 stages :
1. standard challenges for good basic performance in reporting & budgeting
2. high stake initiatives that lead to senior roles and corporate influence
3. continuous learning of technical, managerial and strategic skills

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For instance, challenges for a good basic performance include:
organizing reporting with high automation
developing custom tools for finance & cash flow
controlling internal planning and strategic tools
capturing in-depth understanding of industry and operations
managing international operations from a distance

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High stake transactions shape reputation & credibility:
overseeing complex IT projects
driving corporate operational excellence programs
leading strategic planning
implementing mergers and acquisitions
negotiating international ventures

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Senior roles call for sharper people and strategic skills:
reading people
presenting for impact
translating vision into action
leading large value creation projects
designing structure & organisation
winning investors trust

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Study participants indicated that poor career guidance may
lead young CFOs & aspirants to make the following mistakes:
not reading challenges well ahead
choosing titles ahead of better mentoring
relying solely on technical skills for influence
letting ego build up a trap for a downfall
having no plan B in their pocket
losing passion of learning
losing track of family
Seeing clearly ahead shapes more productive careers
* include controllers, VP finance, young CFOs...

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BUILDING UP A ROADMAP FOR OUTSTANDING CFO SKILLS

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BUILDING A ROADMAP FOR THE CFO: 5 LEVELS OF COMPETENCES
The potential value added from the F&A function is wide and incremental:
from basic financial statements to international fluency, to co-pilot.
CEOs can plan to accelerate the CFOs contribution.
Strategic
International
Advanced
Strategic planning
Operational excellence
Growth & M&A
Company valuation
Intermediary
Global fluency
Foreign exchange
Partnerships
Forecasts
Financing strategy
Investments
Basic
Value-added reports
Budget planning
Strong teams
Standard accounts
COGS

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Early roadblocks are mostly technical, but shift rapidly to managerial and strategic.
TYPICAL ROADBLOCKS
DESIRED OUTCOMES
LEVEL
Co-pilot
5
Early mentoring of strategic skills
Strategic influence
International
expert
Experience in managing risk from a distance
Global fluency
4
Advanced
Adequate finance & cash flow training
Finance strategies
3
Intermediate
Integration of IT platform & accounting
Building strong teams
2
Operational intelligence
Basic
1
Mastering COGS
Financial statements

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On becoming lean & strategic
CFO FOR THE 21ST CENTURY
Conclusions
Lean & strategic finance functions require a match between the CEOs demand for
high standards and the CFOs technical and managerial capabilities.
CFO candidates should balance their continuous professional development in a
mix of technical, managerial and strategic skills.
Coaching and training for young CFOs can greatly accelerate their potential.
Skills development can be structured for quick pay-offs.

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EXECUTIVE EXPERIENCE AS CFO:
M. Du Sault has accumulated more than 20 years in corporate financial management:

Annual consolidated financial statements audited and sent to the head office on 10 January.

17. Having a budgeting and strategic process impeccably integrated to the information systems.

18. Preparing monthly executive reports limited to 10 pages, that speak loud and clear, with insights.

19. Managing international treasury (financing and hedging) programs, over and through financial crises.

20. Meticulous planning of M&A activities, with emphasis on integrating and capturing synergies.

21. Executing several corporate programs on Operational Excellence.

22. Outlining strategic guidelines for pension fund investments.

MULTINATIONAL EXPERIENCE
Novartis AG (Pharmaceuticals, Agro, Chemicals, Nutrition, Animal Health, Environment), Switzerland
M. Du Sault was a head office delegate from 1987 to 1999, as CFO in a variety of country holdings, with revenues ranging from $US 15 M to $500 M.

Switzerland, Head Office: Controller for Europe

23. Sweden - Auditor: Internal audit program

24. Brazil - Controller: Multiple financial crises, with hyper inflation (1000% p.a.)

25. Philippines - CFO & HR: Restructuring for growth

26. Spain CFO: Turnaround andbest merger operation acknowledged within the Novartis group

27. Mexico CFO: Novartis merger, local economic crisis, M&A activities

FINANCE FOR SME:
Worked in a variety of industrial and technology sectors, from start-ups to mid-size companies.

Fund raising for private technology companies

28. Public fund raising for Capital Pool Companies

29. Restructuring of finance departments for higher productivity and coaching new CFOs

30. M&A activities for SMEs (USA-Canada).

About the author
Andr Du Sault
MBA (LBS)
MPA (Harvard)

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DS&H
DS&Hhas designed a series of programs for better CFOs
DS&H CFOTraining Programs
For more information & insights
from the study:
Andr Du Sault
514 777-1538
[email protected]
FINANCE FOR small SME
1.5-day
Value added beyond accounting
DevelopOutstanding CFOs
3 days
The foundation for senior roles
The CFO as co-pilot
0.5-day modules
High level expertise & influence

32. On becoming lean & strategic
DS&H CFOIndividual Programs
For more information & proposals:
Andr Du Sault
514 777-1538
[email protected]
June 2011
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1. Coaching the young CFO and aspirants
Seeing clearly ahead
Critical issues & smart choices
2. Fixing and improving the F&A dept
Before it all crumbles down
Symptoms & remedies
3. Mastering foreign exchange risks
When doing business overseas
A discipline & tool kits

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DS&H
DS&H CFOConferences
For more information & insights:
Andr Du Sault
514 777-1538
[email protected]
International finance
Mastering foreign exchange
Successful international partnerships
Doing business in Asia with no regrets
From great ideas to breakthrough innovations
Lifting strategy onto the board agenda

Business

DS&H - CFO study findings: Pathwats to become lean & strategic